Important legal information about the email you will be sending. By using this service, you agree to input your real email address and only send it to people you know. It is a violation of law in some jurisdictions to falsely identify yourself in an email. All information you provide will be used by Fidelity solely for the purpose of sending the email on your behalf. The subject line of the email you send will be "Fidelity.com: "
529 plans are flexible, tax-advantaged accounts designed specifically for college savings. They are offered by individual states, but you do not have to be a resident of a particular state to invest in that state's plan. When the child for whom you’re saving reaches college age, withdrawals used for qualified higher education expenses are free from federal income taxes and in many cases state taxes.
First, there are some features that are common to all state-sponsored 529 plans including:
When choosing a 529 plan, Fidelity suggests that families consider the following:
Investors should first determine whether their own state’s plan offers significant tax benefits, such as a state income tax deduction. If it does, they should consider investing in that plan. However, it's possible that a state plan may offer tax incentives, but have a record of poor performance or charge high fees that could offset the tax benefits. Fidelity suggests that investors consider a range of additional factors, including a plan's investment manager, investment options, plan performance, and underlying fees and expenses when choosing a plan.
Fidelity manages four state-sponsored 529 plans that have no residency requirements. The plans share similar features and management philosophies.
Yes, however, you must first liquidate the assets in the UGMA/UTMA account and pay any applicable taxes. Investments may be subject to fees and expenses. After liquidation, you can invest the cash in an UGMA/UTMA (Custodial) 529 plan account. An UGMA/UTMA 529 plan account will be subject to the rules for both types of accounts, including applicable UGMA/UTMA state statutes. You cannot change the beneficiary of an UGMA/UTMA 529 plan account. You may want to consult a tax professional regarding your specific tax situation.
You will likely want separate 529 plan accounts for each child. Each 529 plan account can have only one beneficiary. Many investors choose to take advantage of the age-based portfolio strategy for their accounts, which manages the account based on the age of the child. For this reason, you may want separate accounts for children of different ages.
Yes, you can. This type of transfer is called a rollover. Under federal tax laws you are allowed to roll over a 529 plan account for each beneficiary once during any 12-month period. To roll over an account, download the Fidelity College Investing Plan Rollover Form (PDF) or call us at 800-544-1914. Fidelity can initiate the roll over for you.
529 plans offer significant flexibility should the designated beneficiary (student) decide not to attend college. You can take out the money as a non-qualified withdrawal, but any earnings on non-qualified distributions are subject to federal income taxes at the recipient's rate as well as a 10% federal penalty. You can also change the beneficiary on your 529 plan account to eligible family members of the original beneficiary without incurring federal income taxes and the 10% federal penalty.
A family member is a person who has one of the following relationships with the original beneficiary: (1) son or daughter; (2) stepson or stepdaughter; (3) brother, sister, stepbrother, or stepsister; (4) father, mother, or an ancestor of either; (5) stepfather or stepmother; (6) son or daughter of a brother or sister; (7) brother or sister of a father or mother; (8) son or daughter-in-law, father or mother-in-law, brother or sister-in-law; (9) spouses of the individuals listed in (1)–(8) or the spouse of the beneficiary; and (10) any first cousin.
The Pension Protection Act of 2006 permanently extended the federal tax-free status for qualified withdrawals from 529 college savings plans, which were previously set to expire in 2010. This means that any contributions made to 529 plans in the past and any contributions made in the future will grow federal income tax deferred, and distributions for qualified higher education expenses will be free from federal income taxes.
Call a college savings representative.
The UNIQUE College Investing Plan, U.Fund College Investing Plan, Delaware College Investment Plan, and Fidelity Arizona College Savings Plan are offered by the State of New Hampshire, MEFA, the State of Delaware and the Arizona Commission for Postsecondary Education, respectively, and managed by Fidelity Investments.
If you or the designated beneficiary is not a New Hampshire, Massachusetts, Delaware, or Arizona resident, you may want to consider, before investing, whether your state or the designated beneficiary's home state offers its residents a plan with alternate state tax advantages or other benefits.
Units of the Portfolios are municipal securities and may be subject to market volatility and fluctuation.
Please carefully consider the Plan's investment objectives, risks, charges and expenses before investing. For this and other information on any 529 College Savings Plan managed by Fidelity, contact Fidelity for a free Fact Kit, or view online. Read it carefully before you invest or send money.